In a big relief to Flipkart, the Calcutta High Court had stayed West Bengal Government’s decision to levy 1% Entry Tax on generating way-bills for bringing in goods from outside the State.
Instakart services that run the logistics division of Flipkart, eKart had approached the Calcutta High Court alleging that the tax was without any legal basis and led to a high cost of goods which ultimately affected the customers in the state.
The petitioner says that one of the conditions for the petitioner, as a courier company, to generate its own way-bills by electronic means is to deposit the entry tax on the goods. Since the provisions pertaining to entry tax have been struck down by a Single Bench of this court and the order has not been stayed in appeal, the State has no authority to insist on payment of entry tax in any manner or form.
The State says that the facility extended to courier companies and the like under Rule 110C is a privilege and cannot be regarded as a right. The State asserts that it will not be possible for the State to realize the entry tax if it is ultimately found that the relevant statute or the concerned provisions are intra vires the Constitution.
In the order, Court said that, whether or not Rule 110C of the said Rules is a privilege, as long as such Rule exists it is not open to the State to insist on the payment of entry tax for obtaining the benefit under such Rule despite the provisions as to entry tax being struck down. As a consequence, the petitioner will be entitled to generate way-bills in terms of the said Rule without payment of any entry tax and if the program or the system has to be altered for such purpose, the State is directed to do so immediately such that no inconvenience is occasioned to the petitioner in the electronic generation of way-bills without payment of entry tax.
The next hearing posted on June 2016.
Read the full text of the order below.
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